ICCB recommends forming task force to tackle US tariff issue

Highlights:

• ICCB urges Commerce Ministry to form task force for tariff strategy
• New US tariffs may initially shock Bangladesh's export sector
• ICCB suggests tariff cuts on US goods to ease tensions
• Exporters could face $750–800M tariff impact on current garment orders
• Tariffs may reduce US demand, increase EU competition for Bangladesh

The International Chamber of Commerce Bangladesh (ICCB) has recommended forming a task force under the Ministry of Commerce in order to find a way out of the newly imposed additional tariffs on export goods entering the US market. This task force should include all relevant ministries and divisions, as well as importers and exporters, to determine a national course of action and engage in negotiations with the United States.

The recommendation was made by the organisation at a press conference held yesterday at Hotel Tulip Garden in Banani, Dhaka.

ICCB President Mahbubur Rahman; president of Bangladesh Association of Banks (BAB) and Bangladesh Textile Mills Association (BTMA) Abdul Hai Sarker, Metropolitan Chamber President Kamran T Rahman, Foreign Chamber President Naser Ezaz Bijoy, Dhaka Chamber President Taskin Ahmed; former BKMEA President Fazlul Haque; and Transcom Group CEO Simeen Hossain were present at the press conference among others.

Business leaders expressed concerns at the new US tariffs on export products, saying that this may initially cause a shock to exports. They, however, believe that the situation can be overcome through dialogue.

They praised the government steps taken to deal with the situation, but noted that sending a letter to the Trump administration alone is not enough; Chief Adviser Dr Muhammad Yunus could also speak directly with President Trump.

ICCB also put forward several recommendations to handle the situation, including reduction of tariffs on goods imported from the US, enhancing diplomatic efforts with the US, setting tariff rates based on bilateral agreements and collaborating with other affected countries to launch a joint initiative.

ICCB President Mahbubur Rahman cited Vietnam's decision to impose zero tariffs on American goods. He lauded the caretaker government's emergency meeting on the issue, and emphasised patience and confidence, stating that if other major exporting countries can manage, Bangladesh can too.

Fazlul Haque said that products already at ports or in transit will not be subject to the new tariffs, but for the next 3-4 months, factories working on export orders may face losses. He mentioned that about $2 billion worth of garments are currently being manufactured for export, and these could incur an additional $750–800 million in tariffs.

The former BKMEA President added that If exporters and buyers agree to split the extra costs, Bangladeshi exporters may still have to pay around $350–400 million. He mentioned that China has been sharing the burden of the tariffs with its buyers in the US since Trump imposed additional tariffs following his re-election. 

Abdul Hai Sarker pointed out that there is no import tariff on cotton from any country, including the US. Increasing cotton imports from the US is possible, but it would cost 4–5 cents more per unit. Thus, producing goods with US cotton could raise production costs and reduce competitiveness. However, cost reduction in other areas within the business could help offset the increase, he opined.h

The president of the Foreign Chamber said that the additional tariffs will impact Bangladesh's economy in two phases. First, exporters' profits may decrease as foreign buyers are unlikely to bear the full cost of the increased tariffs. Second, demand for products in the US market may decline, affecting export volume.

Additionally, if the US market becomes less attractive, other exporting countries might shift their focus to the EU, increasing competition for Bangladesh in the European market.